The market for telecommunications services has grown at an extraordinary pace, and perhaps the greatest growth has occurred in the market for wireless communications, including cellular networks and personal communication systems.
Conventional wireless telecommunication systems employ numerous independent cellsites ("cells"). Each cell covers a designated geographic area and is connected via a dedicated network (usually leased lines or microwave) to a Mobile Switching Center ("MSC") that is in turn connected to the Public Switched Telephone Network ("PSTN"). The MSC handles all call processing intelligence, switching functionality, fault detection and diagnostics. MSCs are also integral to the operation of recently developed Personal Communication Systems ("PCSs"), another type of wireless system. A PCS utilizes numerous "microcells" that blanket a high use area, or an area where terrain features limit transmission capabilities (e.g., a downtown office district with tall buildings.) Because of the greater number of cells, the PCS can handle a significantly greater volume of traffic. Located within each PCS microcell is a low power transmitter. After receiving the subscriber's signal, the low power transmitter communicates (normally via microwave, PSTN, or data lines) with a controller. The controller, in turn, communicates with the MSC. Each PCS or cellular network covers only a specified "home" geographic area. Consequently, as the mobile user moves out of the home area and into a "foreign" area, telecommunications service is provided by a "foreign" wireless service provider typically not associated with the user's home wireless service provider. Operation in a foreign area is known as "roaming."
The deployment of Signaling System Number 7 ("SS7") networks for wireless systems like PCS or cellular networks has permitted carriers to supply a number of new applications to wireless systems' customers. SS7 is a highly flexible common channel signaling standard specifically designed for providing circuit and database related message flow control in networks. The feature enhancements to services made possible SS7 have accelerated its deployment. But most cellular systems continue to use services furnished by outside network providers. The high price of those services has tended to lead wireless services providers to deploy their own SS7networks.
The fees associated with the use of network services provided by third parties, which may be charged on a per transaction basis, lead to higher consumer prices for wireless communications services. The cost of paying network providers to operate a SS7 or other network, and the consumer prices they result in, may represent a serious constraint on wireless growth. An additional impediment to growth in the market for wireless services is the absence of a seamless roaming environment. In a seamless roaming environment, enhanced communications services are provided to mobile subscribers as they move about the nation (or, more optimistically, through various parts of the world), without diminution in service as one crosses boundaries between service providers.
Fraudulent uses of wireless systems pose an even greater threat to growth of wireless communications. For example, industry fraud losses exceeded an estimated four hundred million dollars in 1994.
Geographic expansion of services permitted by the creation of a nationwide network has accelerated the already significant cellular fraud. The incidence of fraud has significantly worsened as carriers allow users to make calls from anywhere in the country. Losses for 1995 are estimated at over one and a half million dollars per day. Growth in fraud losses for the first time exceeds industry growth.
Indeed, some wireless service providers have been forced by the overwhelming costs of fraud to suspend roaming service in foreign areas where its incidence is high. Preventing or minimizing the fraudulent use of wireless systems is therefore a necessary precondition to putting the industry back on a solid growth track and developing a nationwide network providing seamless roaming.
Two types of fraud are prevalent. One is "cloning fraud," in which a valid customer's mobile identification number ("MIN") and/or electronic serial number ("ESN") are "cloned" or copied into another cellular set. Most typically, cloning fraud is perpetrated in a foreign service provider's network. Even when the fraud occurs outside of the home service provider's network, the home service provider remains liable for the fraud, the costs of which directly diminish the service provider's revenue.
A second typical fraud problem involves subscribers who are not entitled to service (e.g., because they have failed to pay their bills or obtained service under false identities, etc.), but who nevertheless attempt to obtain roaming service in a foreign service provider's wireless system. Roaming involves a validation process to determine if the roamer is legitimate in its home system. The switches of systems located geographically close to one another are often coupled because those systems' customers will frequently roam into the adjacent area. These systems can directly communicate with one another to exchange validation requests and fraud control data. In any event, even if some switches of different systems were coupled, those switches may nevertheless be unable to communicate with one another to exchange validation requests and fraud control data for the simple reason that the switches may be incompatible with one another. As a result, a national clearinghouse system for handling fraud and roamer management has arisen.
A national clearinghouse typically has a database containing so called "negative files" including lists of stolen phones and cloned MINs. The typical clearinghouse also couples to the MSCs of subscribing systems in order to access subscriber data, usually called the HLR or Home Location Register, to validate subscribers for whom services are being requested in a foreign market whose service provider is also a member of the clearinghouse network. A national clearinghouse is capable of providing on-line support as well as a data feed. The clearinghouse validates customers prior to allowing a request for telecommunications service to proceed. But by the time the clearinghouse checks its own database and then, if necessary, the database of the subscriber's carrier, the foreign carrier may already have permitted a fraudulent roaming communication to occur.
In order to detect "cloning fraud," a service provider may use, among other methods, a fraud management system that develops usage profiles. These profiles are based on the communications traffic information for particular customers and are obtained from billing records and other sources. If a call does not match the customer's profile, an analyst may contact the customer. A fraud detection system (like CloneDetector available from GTE TSI (Telecommunications Services Inc.)) analyzes calling patterns to identify calls made close in time using identical MINs in widely-separated geographical areas. This type of condition generally indicates that one of the MINs is a clone. The customer corresponding to the MIN is contacted for confirmation and appropriate steps are taken to lock the clone out of the system.
Some clearinghouses are presently attempting to offer both fraud detection systems and customer on-line support systems intended to react in real time. Clearinghouses charge each subscribing service provider a per-transaction fee for providing fraud management services and also charge for certain on-line support data. In addition to charging transaction fees, clearinghouses incorporate each subscribing service provider's valuable and commercially sensitive customer information into a central pool within its exclusive control. Clearinghouses provide needed roamer visibility. But subscribing service providers lose the ability to obtain data on their own network transactions if they choose not to utilize the clearinghouses for validation for particular transactions if they choose not to utilize the clearinghouses for validating particular transactions. Data of this sort is critical, not only for network operation, but also for purposes of planning and marketing. Understandably, subscribing service providers also prefer to maintain control over their own customer profile and system traffic information. They thus prefer to eliminate the clearinghouse service and directly manage user validation for their own networks in order to eliminate the transaction fees charged by the clearinghouses and obtain their own on-line support data.
Subscribing service providers can circumvent the clearinghouse services by networking their switches with switches in foreign service providers' systems. This process is facilitated by deployment of SS7 networks, coupled with the advent of IS-41. IS-41 is an interim standard created by the Electronic Industry Association/Telecommunications Industry Association ("EIA/TIA") that permits switches produced by different manufacturers to communicate with one another. IS-41 enables the switch of a home system of a roaming subscriber to communicate with a foreign system providing services to the roaming subscriber in order to transmit validation and customer profile information. IS-41 messages may be transported over SS7 networks that many service providers are already connected with or soon will be deploying. Other standards may be developed and will likely also be capable of transmission over SS7 networks. Using such standard message formats and protocols, switches belonging to differing service providers become capable of requesting validation data and exchanging customer profile information. This information sharing not only eliminates the high transaction charges associated with a national clearinghouse, but it also returns control of valuable, proprietary customer profile information to the service providers.
Since many such fraud detection systems (such as GTE'S) obtain fraud control and customer support data feeds from links between an individual MSC and clearinghouse, as wireless service providers connect their switches directly using SS7 or another network, the data traffic occurring between such interconnected switches is no longer "visible" to the clearinghouse system. In other words, clearinghouse systems often cannot obtain information on transactions involving wireless service providers whose switches are coupled directly to each other via the SS7 network.
Obviously, this is a problem that directly impedes clearinghouses ability to provide accurate and comprehensive fraud control and customer support data. The problem will accelerate as more service providers interconnect via SS7 or other networks. Such interconnections will increase as service providers take advantage of the flexibility of the SS7 network and new standards like IS-41 in order to interconnect directly with other service providers in adjacent geographic regions or in high use metropolitan areas frequented by business or tourist travelers.
Further, with the advent of SS7 networks, future service enhancements are likely. Those enhancements should be provided without disrupting fraud data feeds and other customer service operations; current systems do not eliminate or minimize disruptions, however.
As wireless service providers link their switches and move toward a nationwide network, "they will bypass the traditional methods of capturing roamer messages. They will have to assume more responsibility for insuring that the systems they use provide the required level of message visibility to maintain superior customer service and roamer management--especially as more customers are roaming and using additional enhanced services." Rolando Espinosa, "The Industry's Most Important Challenge: Cellular Signaling Network Management," Telephony, Vol. 227 at 27 (Aug. 22, 1994.) The ongoing and projected future conversion to SS7 networks therefore requires new methods and systems to extract fraud control and customer support information.
Even for service providers that may not adopt the SS7 or other standard network protocols, fraud control and customer on-line support systems furnished by outside providers suffer from drawbacks, both technical and financial. Among their technical shortcomings, the systems may not provide the full fraud data feeds necessary for minimizing and managing network fraud. Nor do the systems provide complete message "visibility" --information on transactions with some of the carrier's closest roaming partners may not be obtained and transmitted to either the fraud control or customer support systems. Financially, reliance on outside network providers for fraud control and customer support systems costs service providers significant ongoing transaction fees.